TSMC Tightens Chip Orders Below 16nm for China Following US Regulations
TSMC, the world’s leading semiconductor foundry, has reportedly imposed stricter restrictions on Chinese IC design companies, limiting orders below 16nm. This move aligns with US regulations aimed at controlling China’s access to advanced semiconductor technology.
TSMC’s Cautious Approach Amid US-China Chip War
The Taiwan Economic Daily reports that TSMC has informed Chinese IC firms that it will suspend shipments of chips below 16nm unless they comply with a specific set of regulations. This decision follows the controversy surrounding TSMC’s chips allegedly being used in Huawei’s AI processors.
The restrictions reflect the ongoing US-China chip war, with US authorities pushing for greater oversight on semiconductor supply chains. The new rule has been in effect since January 31, requiring all orders below 16nm to be packaged by a BIS-compliant OSAT (Outsourced Semiconductor Assembly and Test) firm.
Impact on China’s Semiconductor Industry
As a result of TSMC’s new policy, many Chinese IC design firms have started shifting their packaging orders to BIS-approved companies to ensure continued business with TSMC. However, industry experts believe this restriction will have a limited financial impact on TSMC, as 16nm orders contribute less than 10% of its total revenue.
Interestingly, while China dominates mature node production at 16nm and 18nm, many of its semiconductor customers are American and European automotive manufacturers. ASML’s CEO previously stated that global semiconductor supply chains still rely on China, despite US regulatory pressures.
What’s Next for China’s Chip Industry?
China’s semiconductor firms are expected to adapt quickly, ensuring compliance with the new regulations to maintain their orders with TSMC. While the restriction is significant, its immediate impact may be muted due to early industry adjustments.
With the evolving geopolitical landscape, the semiconductor battle between the US, China, and Taiwan is far from over. The coming months will reveal how China navigates these restrictions and whether alternative solutions emerge to counter TSMC’s policy shift.
